T/616/3032 Accounting for Managers Assignment

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Reference no: EM133102085

T/616/3032 Accounting for Managers - OTHM Level 5 Diploma in Business Management

Level 5

Learning outcome 1: Understand accounting concepts and conventions.

Learning outcome 2: Be able to prepare financial statements for sole traders, partnerships and limited firms from ledger accounts and incomplete records.

Learning outcome 3: Be able to evaluate financial performance.

Learning outcome 4: Understand the UK Regulatory Framework for accountancy and finance.

Scenario
You have applied for a job in the accounting department of a department store.

Task 1
Instructions

As part of the application form, you are to answer the following questions:
1. Explain the aims and purpose of financial and management accounting to business.

2. Who are the various users of accounting information and what information would these users require?

3. Describe the role of the International Accounting Standards Board (IASB) and the Standards Advisory Council (SAC)

Task 2 Accounting Test

After successfully being called in for an interview. You have been asked a problem to solve to test your ability in basic accounting.

Problem 1

Jack Uzi, wholesale toys online, operates out of his office in his parents' apartment, with 0 inventory. Every toy he sells is first purchased then re-sold, but only after the order comes through. You need to help him out with his bookkeeping. The following transactions occurred in October:

a. Paid £500 for lease of computer equipment in advance for November
b. Cash Sales of £4,847. (for stuffed animal)
c. Cash sales of £4,486 (for Educational Toys)
d. Cash sales of £4,702 (for Video Games)
e. Cash Sales of £1,827 (for Pretend-play toys)
f. Purchase of office supplies on account from Bing's Office Supply, £416.
g. Withdrawal by owner (Jack Uzi) of £1,600.
h. Payment on account (Bing's), £390.
i. Payment of wages with cash, £2,500.
j. Payment for cleaning services with cash, £74
k. Payment to purchase stuffed animal, £4,044
l. Payment to purchase Educational Toys, £3,547
m. Payment to purchase Video Games, £4,169
n. Payment to purchase Pretend-play toys, £1,382

Instructions
1. Prepare books of original entries (Sales journal, purchase journal, cash journal)
2. Prepare the general ledger
3. Jack checked his bank balance and he noticed that his actual cash balance was £20 less due to overdraft fees, make the necessary adjustments
4. Prepare a trial balance for October 31 2017
5. Prepare a cash Flow Statement for October 31, 2017
6. Prepare an Income Statement for the period ending October 31, 2017
7. Prepare a Balance Sheet for October 31, 2017

Problem 2

WoodyTrain has the following income statement (turn page)

Instructions

1. Using the usual ratio categories (Liquidity ratios, Solvency ratios and Profitability ratios), classify the following ratios
• Current Ratio
• Acid-Test Ratio

• Debt-Equity Ratio
• Profit Margin
• Return on Owners' Equity

2. Calculate the following ratios
• Debt-Equity Ratio
• Profit Margin
• Return on Owners' Equity

3. Based on the information provided and your ratio, how would you describe the financial performances of WoodyTrain?

Attachment:- Accounting for Managers.rar

Reference no: EM133102085

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